AO can’t treat commission income as unexplained income without considering details submitted by assessee

AO can’t treat commission income as unexplained income without considering details submitted by assessee

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AO can’t treat commission income as unexplained income without considering details submitted by assessee

Amitbhai Manubhai Kachadiya
[2021] 131 taxmann.com 318 (Surat-Trib.)
Short overview of the case:
The case was with regard to Section 68 of the Income-tax Act, 1961 on unexplained  Cash credit towards Commission.
The relevant Assessment years were 2011-12 to 2013-14
 In return of income, assessee had shown commission income and also claimed certain expenses
Assessing Officer noted that assessee failed to submit details regarding commission income and failed to prove with supporting evidences from whom commission was received and he concluded that assessee received commission income from unknown source and treated same as cash credit under section 68
It was found that assessee during course of assessment had explained that it was maintaining all regular books of account and other records for commission income expenses and ledger account of commission income was furnished, along with party-wise details and available addresses and amount of commission
 No finding was given on such explanation furnished by assessee
 Moreover, Assessing Officer had not doubted various expenses claimed against commission income
 Whether, on facts, there was no justification in treating commission income as unexplained cash credit
 ITAT held it as yes.
It concluded as under:
Where assessee explained that he was maintaining all regular books of account and other records for commission income and he had also incurred certain expenses, which could be verified and ledger account of commission income was furnished, along with party wise details and available addresses and amount of commission, there was no justification in treating commission income as unexplained cash credit.

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